Tag: economics

3 Economic Myths That Need To Die

Posted on by Lone Candle

“Not only do we Americans still produce an enormous economic output, but the U.S. also continues to be a dominant force in manufacturing. A recent paper by the Cato Institute’s Colin Grabow even reports that American manufacturing surpasses the output of Japan, Germany, and South Korea combined. We are the world’s second-largest manufacturing economy and, better yet, we are a global frontrunner in critical sectors such as automotive and aerospace.”

…

“government spending is not inherently efficient or effective. It often leads to a misallocation of resources, bureaucratic inefficiencies, and unintended consequences that exacerbate the problems government aims to solve. And when government fails, its mistakes are hard to correct. It’s a sharp contrast with the dynamic and adaptive nature of free markets. The collective decisions of millions of individuals freely spending and investing their own money are incredibly effective at allocating resources, responding to consumer needs and driving innovation. And when the market fails, people with their own money on the line don’t hesitate to change course.”

https://reason.com/2024/01/04/3-economic-myths-that-need-to-die/

New Tariffs on Tin Cans Get Biden Administration Approval

Posted on by Lone Candle

“The Commerce Department has officially declared a trade war on cheap tin cans.
Last week, the department gave a green light to placing new tariffs on tinplate steel—the metal used to manufacture tin cans and a wide variety of other consumer goods—imported from Canada, China, Germany, and South Korea. While the new tariffs are far less extensive than the absurdly high trade barriers originally requested by Cleveland-Cliffs, an Ohio-based steel company that is one of the few companies in America to make tinplate steel, the tariff decision once again underlines the arbitrary and cronyist nature of federal trade policy.”

…

“Because the tariff-petition process is heavily skewed in favor of companies seeking protectionism—among other things, the Commerce Department is forbidden from considering how higher tariffs might impact other parts of the economy, including consumers—industries that need reliable access to tinplate steel were prepared to take a hit.

The Consumer Brands Association (CBA), which represents more than 2,000 companies including Campbell Soup Company and other brands that stood to be harmed by the tariffs, estimated that Cleveland-Cliffs’ proposed tariffs would have added about 58 cents to the cost of the average canned food product. A separate study by the Trade Partnership Worldwide LLC, a pro-trade think tank, found that 600 jobs would be put at risk for every steel-making job protected by the proposed tariffs.”

…

“A single American company was able to file a petition asking unelected bureaucrats to punish its competitors (along with many downstream businesses and consumers) in order to goose its bottom line, triggering a review process that cost taxpayer resources and forced other businesses to play defense in a game that’s deliberately rigged against them.”

https://reason.com/2024/01/09/new-tariffs-on-tin-cans-get-biden-administration-approval/

This Christmas, Americans Can Afford More Toys Than Ever

Posted on by Lone Candle

“Inflation has been a nasty grinch for the past few years—seemingly stealing away our hard-earned dollars while we sleep.
But the rising prices throughout much of the economy make it a little easier to appreciate the things that seem to be inflation-proof.

Like video games. When The Legend of Zelda: Ocarina of Time was released in 1998, it cost $69.99 to order through the Sears catalog. Another Zelda game, Tears of the Kingdom, was released this year—25 years later—and it retailed for $70. That actually made it one of the most expensive games of the year, since most new Nintendo games these days sell for about $60.

Do the math. If Zelda games had kept pace with inflation, the new one should have cost about $130 today.

Sure, games today achieve some cost-savings because they’re digital downloads. That means production companies like Nintendo don’t have to pay for a physical game cartridge or CD-ROM, packaging, or shipping. But games today are also far, far more advanced than anything you could have bought for any amount of money a quarter-century ago.

It’s not just video games that have defied inflation’s steady creep. Toys in general are less expensive today, even before adjusting for inflation, than they were a few decades ago. That’s despite the fact that wages have grown significantly over the same period of time. The average worker in the United States made about $13 an hour in December 1998, compared to about $29 dollar per hour now.

This is true over longer periods of time too. As I wrote earlier this year, the amount of work necessary to buy a single new Barbie has fallen quite a bit since the doll was introduced. According to what University of Central Arkansas economist Jeremy Horpedahl has termed the “Barbie Price Index,” the average American woman has to work about 30 minutes to afford a Barbie—down from about two hours in 1959, when the doll first appeared on store shelves.

In fact, toys are so much cheaper today that some columnists say it’s a problem. “A toy that cost $20 in 1993 would cost only $4.68 today,” writes Katie Notopoulos, a senior correspondent at Business Insider.”

https://reason.com/2023/12/22/this-christmas-americans-can-afford-more-toys-than-ever/

This week in Bidenomics: US airstrikes target inflation, too

Posted on by Lone Candle

“The Middle East war is widening, but that may be better than the alternative: new inflationary pressure from an obscure fundamentalist militia 8,000 miles from US shores.
The US and UK militaries finally struck back at Houthi forces in Yemen on Jan. 11 and 12, in response to at least 27 Houthi attacks on commercial ships navigating the Red Sea between northern Africa and Saudi Arabia. There were legitimate military reasons for the retaliatory strikes, given that the Houthis have targeted US and allied forces, including Israel. But there was a powerful economic incentive too: The attacks on commercial vessels were starting to drive up shipping costs and threatening to reignite inflation, just as the Biden administration feels it is finally taming the biggest barrier to a second term for President Biden.

The Red Sea is a crucial shipping lane because the Suez Canal, at its northern tip, connects waters that serve Western markets with the Indian Ocean and routes to Asia. Ships unable to transit the Red Sea need to take the much longer and costlier journey around the southern tip of Africa. About 15% of world trade transits the area.”

https://www.yahoo.com/finance/news/this-week-in-bidenomics-us-airstrikes-target-inflation-too-191234965.html

California’s New Minimum Wage Is Predictably Killing Food Delivery Jobs

Posted on by Lone Candle

“A new California law will require that most food-service workers get paid at least $20 per hour starting next year.
But hundreds of pizza delivery drivers in the Los Angeles area are about to discover Thomas Sowell’s famous adage that the true minimum wage is zero.

Pizza Hut announced Wednesday that it would lay off about 1,200 delivery drivers in Los Angeles, Orange, and Riverside counties, CBS News reported. Pizza Hut franchises are outsourcing delivery to third-party apps like GrubHub and UberEats as a cost-saving measure in advance of the new law taking effect.”

https://reason.com/2023/12/27/californias-new-minimum-wage-is-predictably-killing-food-delivery-jobs/